In view of the possible American recession, can refuge be found in the emerging economies?

Posted by , 6th March 2008

Today Brazil receives an important flow of capital in the form of direct, as well as financial, investments, partly induced by the differential between the American and domestic interest rates. What would happen if the United States were to effectively slip into a recession and the Federal Reserve were to decide to continue lowering the rates? What would the consequences for the local economy be?

When will Venezuela head towards a modern democracy and a Welfare State?

Posted by , 6th March 2008

Hugo Chavez’s flight forward is unprecedented in Venezuela’s history, states the author. Meanwhile, the social disorganization, the failure of the educational system, underemployment, shortages of supplies, uncontrollable inflation, police and judicial administrative inefficiency, steady poverty and political polarization (stronger than ever) completely discredit a revolution that announced better times for Venezuela, but has ended up being a true fiasco.

The Cuban regime will continue what it began after the fall of the Soviet Union and the loss of its principal economic support: a slow and gradual transition, not in the direction of democracy, but towards a State-guided economy more open to the market. In other words, towards policies that are more in line with China and Vietnam’s. A good deal of the Cuban economy already takes the capitalist route. The rupture of the model, however, will not be traumatic; in the end, Cuba will end up being completely integrated into the international community. The problem will be how it will manage to do so.

Mercosur still has two types of imbalances: structural (territory, population, infrastructures…) inbalances and public policy (fiscal matters, investment promotion exports) ones. The author believes that responding to these imbalances means implementing a genuine strategy for regional solidarity, which is not derived from dispersing charity among the poor but instead from the pragmatic necessity of greater benefits.

The limit to energy sources poses a threat to the sustainability of Chile’s economic growth, which is a reason why Michelle Bachelet’s government strongly supports the development of hydroelectric energy in Patagonia. The initiative is tempting for Chilean and Spanish investors and the authorities, but ecologists, farmers, livestock farmers, fishermen, professionals and local cultural associations are making their concerns about the project known. The government’s objective is to have by 2011 or 2012 an energy grid that is more assured than the current one.

Evo Morales and the challenge of reaching a consensus on the constitution

Posted by , 21st February 2008

More than a hundred familial clans control 25 million hectares in Bolivia, five times the territory in the hands of the peasants. This figure translates to a hegemonic standoff, in which the political forces of today (historically low status majority groups) and the economic forces (dominant ethnic minority) do not converge, preventing each group from leading the country as it would like to. In this article I lay out the responsibility of Evo Morales, who will have to ensure a consensus in order to achieve the drafting of a constitution that is accepted by all sectors and guarantees national unity and the principle of authority.

Regarding the release of FARC’s hostages, the presidents of Colombia and Venezuela are prisoners of domestic policy, the author says. Chávez needs outside success to assimilate the referendum’s political debate, and Uribe needs to demonstrate that Chávez is not the only one capable of leading negotiations to free hostages. The author points out that the international community is hoping that these events will reduce the current tension between Colombia and Venezuela, and not the other way around.

Peru is transforming itself into an attractive place for foreign investments

Posted by , 14th February 2008

The progress that Peru has experienced since Alan García regained the presidency is obvious: to the latest economic results (production growth, low inflation rate and proper fiscal discipline) we must add the FTA with the United States and the election of Lima as the host of the Fifth European Union–Latin America and Caribbean (EU–LAC) Summit, as well as the APEC summit. Even with all of this, the recent cases of corruption indicate that there is still a lot left to do, beginning with reform of the public, education, and health sectors, which is a major pending task.

In order to move forward, Asunción needs support from its neighbors, above all from Brazil

Posted by , 7th February 2008

Isolated for so long, and lacking a political culture on which to force democratic values, Paraguay needs help and support from its neighbors in order to move forward. This is especially needed from Brazil, the obligatory country of reference for Paraguayans, and one of the few countries that are capable of positively influencing the management of what will be the new government after the presidential elections in April.